Mortgage brokers are starting to recommend Northern Rock deals, some of which look affordable after months out of the market. The government-owned lender currently has one of the best two-year fixed rate traditionally the most popular mortgage deal for customers who have a 30% deposit and want to borrow more than £500,000. Northern Rock wrote to existing customers in January, in effect advising them to remortgage with another lender when their fixed rate deals expired. However, it now has better deals than lenders such as Nationwide. For example, Northern Rock charges 6.49% on a two-year fix for loans of up to £1m while Nationwide charges 6.75%, with the maximum loan amount capped at £500,000. The lender has also been writing to brokers to say it is available to service applications quickly.

The products that Northern Rock still offers have become more competitive. There are better products available but many are limited on maximum loan amount, so Northern Rock’s deals stack up better on larger loans.

Northern Rock will most likely have to review pricing as its competitive position improves. Those being told to seek a mortgage elsewhere or even worse struggling to refinance would find it a little hard to swallow if Northern Rock was increasing new business volumes through a more competitive offering.